Dear Norma Jean, I really believe you have been ill-advised, as to what is really going on, by your self interested contingency fee lawyer. If you would be so kind to read the following, you may understand the true motivation behind your attorneys actions.. If not, You can email me directly. "peter.michaels@wwwcasinos.com/" However, continual degradation of our company does no one any good! It merely hurts the company's share value. Which means every shareholder. Please read the following very carefully.
Attorney and Counselor at Law
California State Bar No. 59302
640 SOLWAY STREET
GLENDALE, CALIFORNIA 91206
TEL: 818-265-0521 FAX: 818-265-0512
Counsel for Defendants PETER D. MICHAELS,
WORLD WIDE WEB CASINOS, INC., CAROL
DOUGLAS-MICHAELS, KENNETH TOLL,
PJ PROMOTIONS, INC., NET PIRATES, INC.,
BINKY ROO SOFTWARE, INC., DIGITAL AGE, INC.,
WORLD WIDE EXCHANGE, LLC, and
ATLANTIC PACIFIC BANCORP
CALIFORNIA SUPERIOR COURT
ORANGE COUNTY
ED SAKAMOTO, ET AL., ) Case No.: 783771
)
) Assigned for all Purposes to:
) The Hon. Robert D. Monarch, Dept. 29
)
Plaintiffs, ) DEFENDANTS' NOTICE OF GENERAL
) DEMURRER AND GENERAL DEMURRER
) TO PLAINTIFFS' SECOND AMENDED
) CLASS ACTION COMPLAINT; REQUEST
vs. ) TO TAKE JUDICIAL NOTICE; DECLARATION,
) MEMORANDUM OF POINTS AND
WORLD WIDE WEB CASINOS, INC., a ) AUTHORITIES, AND EXHIBITS IN SUPPORT
Nevada corporation; PETER MICHAELS, )
an individual; et al., ) [C.C.P. § 430.10]
)
) Date: January 15, 1998
Defendants. ) Time: 2:00 p.m.
____________________________________) Dept: 29
NOTICE OF GENERAL DEMURRER
TO EACH PARTY AND ATTORNEY OF RECORD IN THIS ACTION:
PLEASE TAKE NOTICE that the within joint and several general demurrer of Defendants, PETER D. MICHAELS, WORLD WIDE WEB CASINOS, INC., CAROL DOUGLAS-MICHAELS, KENNETH TOLL, PJ PROMOTIONS, INC., NET PIRATES, INC., BINKY ROO SOFTWARE, INC., DIGITAL AGE, INC., WORLD WIDE EXCHANGE, LLC, and ATLANTIC PACIFIC BANCORP (collectively "Defendants"), will be heard on January 15, 1999, at 2:00 p.m., or as soon thereafter as the matter can be heard, in Department 29 of the above-captioned Court, located at the County Courthouse at 700 Civic Center Drive West, Santa Ana, California.
GENERAL DEMURRER
Defendants, PETER D. MICHAELS, WORLD WIDE WEB CASINOS, INC., CAROL DOUGLAS-MICHAELS, KENNETH TOLL, PJ PROMOTIONS, INC., NET PIRATES, INC., BINKY ROO SOFTWARE, INC., DIGITAL AGE, INC., WORLD WIDE EXCHANGE, LLC, and ATLANTIC PACIFIC BANCORP, jointly and severally, hereby generally demur to Plaintiffs' Second Amended Class Action Complaint because: a) the class representatives can not adequately represent the class; and/or, b) predominant common questions of law or fact do not exist; and/or, c) the class representatives do not have claims typical of the class; and/or d) allowance of maintenance of the class action will not substantially benefit the parties and the Court.
Accordingly, Defendants, pursuant to Code of Civil Procedure § 430.10(a) and (e), demur to Plaintiffs' Second Amended Class Action Complaint in its entirety on the following grounds:
1. The Court has no jurisdiction of the subject of the cause (class action) alleged in the Second Amended Class Action Complaint (C.C.P. § 430.10(a).
2. The Second Amended Class Action Complaint fails to state a cause of action recognizable as a "class action" (C.C.P. § 430.10(e).
Moreover, Plaintiffs' present attorney of record has a conflict of interest that can not be cured. Thus, the Second Amended Class Action Complaint should be dismissed without leave to amend.
Dated: November 25, 1998 ___________________________________
Marcello M. Di Mauro
Counsel for Defendants
REQUEST TO TAKE JUDICIAL NOTICE
Defendants hereby request that this Court take judicial notice of:
1 – NOTICE OF SCHEDULING OF REVIEW HEARING RE: DEFAULT JUDGMENTS AND TRIAL-SETTING CONFERENCE filed on or about June 10, 1998, in the files and records of Department 21 of this Court, in Case No. 779237, Ed Sakamoto and Norm Narahara v. World Wide Web Casinos, Inc., et al., annexed as Exhibit A.
2 – NOTICE OF ENTRY OF JUDGMENT filed on or about October 15, 1998, in the files and records of Department 21 of this Court, in Case No. 779237, Ed Sakamoto and Norm Narahara v. World Wide Web Casinos, Inc., et al. annexed as Exhibit B.
3 – COMPLAINT FOR BREACH OF CONTRACT filed on May 29, 1998, in the files and records of Department 18 of this Court, in Case No. 774918, Rangestar Telecommunications, Ltd., a Canadian corporation v. World Wide Web Casinos, Inc., et al., annexed as Exhibit C.
Dated: November 25, 1998 ___________________________________
Marcello M. Di Mauro
Counsel for Defendants
DECLARATION OF MARCELLO M. DI MAURO
I, Marcello M. Di Mauro, declare as follows:
1. I am duly admitted to practice before this Court and I am counsel to the above-mentioned Defendants in this action.
2. Exhibits A, B, and C annexed hereto are true and correct copies of what they purport to be.
I declare under the penalty of perjury under the laws of the State of California that the foregoing is true and correct and that this Declaration was executed on November 25, 1998, in Glendale, California. ___________________________
Marcello M. Di Mauro
MEMORANDUM OF POINTS AND AUTHORITIES
I. APPLICABLE LAW ON DEMURRERS
A demurrer can be used to challenge defects that appear on the face of the pleading under attack, or, from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318, 216 Cal.Rptr. 718, 721.)
Indeed, the Code of Civil Procedure specifically authorizes the court to consider, as ground for demurrer, any matter which the Court must or may judicially notice under Cal. Evid. Code §§ 451 or 452. (C.C.P. § 430.30(a).)
Moreover, absence of allegations establishing the prerequisites of maintaining a class action subjects the complaint to general demurrer for failure to state a cause of action. (Bartlett v. Hawaiian Village, Inc. (1978) 87 Cal.App.3d 435, 437-438, 151 Cal.Rptr. 392, 393; Silva v. Block (1996) 49 Cal.App.4th 345, 349, 56 Cal.Rptr.2d 613, 614 – Where "the complaint failed to allege facts sufficient to establish the elements necessary for maintenance of a class action, it was not error for the court to dispose of the matter on demurrer.")
In testing the sufficiency of the cause of action -- or in this instance, the class action complaint -- the demurrer generally admits the truth of all material facts properly pleaded (i.e., all ultimate facts alleged, but not contentions, deductions or conclusions of fact or law). (Serrano v. Priest (1971) 5 Cal.3d 584, 591, 96 Cal.Rptr. 601, 605.) However, there are limitations. Indeed, the allegations of the complaint are not accepted as true if they contradict or are inconsistent with facts judicially noticed by the court. As stated above, in ruling on a demurrer, the Court may consider matters outside the complaint, if they are judicially noticeable under Cal. Evid. Code §§ 451 or 452. In fact, Cal. Evid. Code § 453 requires that the Court take judicial notice of the matters specified in § 452.
In the instant case, as shown below, the above-mentioned records and files of which the Court is requested to take judicial notice, establish that the class representatives can not adequately represent the class; and, that Plaintiffs' counsel has a conflict of interest which can not be cured. For these, and the other below-stated reasons, the demurrer should be sustained.
II. DISCUSSION AND ARGUMENT
A. The prerequisites to maintaining a class action.
As recently summarized (with emphasis added) in Kennedy v. Baxter Healthcare Corp. (1996) 43 Cal.App.4th 799, 809, 50 Cal.Rptr.2d 736, 742:
In order to maintain a class action, certain prerequisites must be met, specifically, "the existence of an ascertainable class and a well-defined community of interest among the class members. [Citation.] The community of interest requirement embodies three factors: (1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class." (Richmond v. Dart Industries, Inc., supra, 29 Cal.3d at p. 470, 174 Cal.Rptr. 515, 629 P.2d 23.)
In addition, as noted by the California Supreme Court, because of the accompanying dangers of class actions, "[t]rial courts [must] carefully weigh respective benefits and burdens ... [and] allow maintenance of the class action only where substantial benefits accrue to both litigants and the courts." [Citation omitted.] (City of San Jose v. Superior Court (1974) 12 Cal.3d 447; 115 Cal.Rptr. 797.)
B. The class representatives can not adequately represent the class.
Clearly then, as one of the prerequisites "[t]o maintain a class action, the representative plaintiff must adequately represent and protect the interests of other members of the class. [Citation.] This requirement is a natural consequence of the equitable origins of the action and is the product in part of the relation between the res judicata effect of the class judgment on absent members and the requirements of due process." (City of San Jose v. Superior Court, supra, 12 Cal.3d at 463, 115 Cal.Rptr. 797.)
In the instant case, however, as shown by judicially noticed Exhibits A and B attached hereto, the original Plaintiffs and class representatives, Ed Sakamoto and Norm Narahara, can not possibly adequately represent and protect the interests of the class as they have a blatant and direct conflict of interest with the class based on their $193,327.41 default judgment taken against Defendant World Wide Web Casinos, Inc. ("WWWC") and three other Defendants. Indeed, the scheduling of the review hearing on the default was noticed on the same day that these "class representatives" filed their Second Amended Class Action Complaint in this Department 29, July 10, 1998 (Ex. A).
Furthermore, after having filed their Second Amended Class Action Complaint on July 10, 1998 at the hearing before this Department 29, these "class representatives", without notice to this Court or counsel for WWWC, went forward with their default hearing on July 22, 1998, and obtained a whopping $193,327.41 default judgment against the very corporation in which the class members own shares! This action was, of course, in blatant violation of the fiduciary duty which a class representative has to members of the class. Mallick v. Superior Court (1979) 89 Cal.App.3d 434, 152 Cal.Rptr. 503.
Moreover, the same counsel that purports to represent the proposed class in the instant action, John N. Zarian, represented "class representatives" Ed Sakamoto and Norm Narahara , in their Department 21 action against Defendant World Wide Web Casinos, Inc. (Ex. A and B.) In addition, Mr. Zarian also represents another client with interests adverse to the class in Department 18 of this Court, Case No. 774918, Rangestar Telecommunications, Ltd., a Canadian corporation v. World Wide Web Casinos, Inc., et al. (Ex. C.) In Rangestar, proposed class attorney, Mr. Zarian, is suing World Wide Web Casinos, Inc. and other Defendants herein for $6,000,000! Again, this $6,000,000 suit is against the very corporation in which the class members (his clients in this action) own shares! This colossal conflict of interest, in and of itself, precludes this class action from going forward with present counsel. (Cal Pak Delivery, Inc. v. United Parcel Service, Inc. (1997) 52 Cal.App.4th 1, 13, 60 Cal.Rptr.2d 207, 214; Flatt v. Sup.Ct. (Daniel) (1994) 9 Cal.4th 275, 284, 36 Cal.Rptr.2d 537, 542 - "The primary value at stake in cases of simultaneous or dual representation is the attorney's duty--and the client's legitimate expectation--of loyalty ..."; Santa Clara County Counsel Attys. Ass'n v. Woodside (1994) 7 Cal.4th 525, 548, 28 Cal.Rptr.2d 617, 630 -"(A)n attorney is precluded from assuming any relation which would prevent him from devoting his entire energies to his client's interests.".)
Accordingly, Plaintiffs' allegations in paragraph 47 of their Second Amended Class Action Complaint that, "Plaintiffs will fairly and adequately protect the interests of the Class. They have retained counsel who is experienced in class action securities litigation. Plaintiffs have no interests which conflict with those of the Class" are not accepted as true as they contradict and are inconsistent with facts judicially noticed by the Court in annexed Exhibits A, B, and C. (C.C.P. § 430.30(a).)
Thus, the essential element that "the representative plaintiff must adequately represent and protect the interests of other members of the class" is missing. (City of San Jose v. Superior Court (1974) 12 Cal.3d 447, 463, 115 Cal.Rptr. 797.) Therefore, absent this allegation establishing one of the prerequisites of maintaining a class action, the Second Amended Class Action Complaint is vulnerable to a general demurrer for failure to state a cause of action. (C.C.P. § 430.10(e)); (Bartlett v. Hawaiian Village, Inc., supra, 87 Cal.App.3d 435, 151 Cal.Rptr. 392; Silva v. Block, supra, 49 Cal.App.4th 345, 56 Cal.Rptr.2d 613.) This omission also subjects the Second Amended Class Action Complaint to general demurrer because the Court has no jurisdiction of the subject of the cause (class action).
C. Predominant common questions of law or fact do not exist; The class representatives do not have claims typical of the class; Allowance of maintenance of the class action will not substantially benefit the parties and the Court.
Defendants contend that based on the absence of the preceding element alone, the Court should sustain Defendants' demurrer. Defendants further submit that predominant common questions of law or fact do not exist, the class representatives do not have claims typical of the class, and allowance of maintenance of this class action will not substantially benefit the parties or the Court.
Indeed, as was originally shown in Defendants' opposition to Plaintiffs' motion to appoint a receiver, as shown above, and as will be again shown in Defendants' motion to disqualify present proposed class counsel – if one is necessary - the class representatives do not have claims typical of the class, and allowance of maintenance of this class action will not substantially benefit the parties and the Court. Rather, this entire action was commenced by Plaintiffs, Ed Sakamoto and Norm Narahara, to advance their own interests, together with the interests of a clever and artful plaintiffs' contingency-fee class action lawyer and a Canadian competitor of Defendant World Wide Web Casinos, Inc., all to the significant detriment of WWWC, its shareholders, and the other Defendants herein. Surely, allowance of maintenance of this class action will not substantially benefit the parties and the Court, but only drive WWWC and the other Defendants into economic ruin with the costs of this litigation, and thus render the shareholders interests worthless. Ultimately, the only parties who will benefit from this oppressive class action are Plaintiffs' lawyer and his Canadian client, Rangestar.
III. CONCLUSION
As shown above, because a) the class representatives can not adequately represent the class; and/or, b) predominant common questions of law or fact do not exist; and/or, c) the class representatives do not have claims typical of the class; and/or d) allowance of maintenance of the class action will not substantially benefit the parties and the Court:
1. The Court has no jurisdiction of the subject of the cause (class action) alleged in the Second Amended Class Action Complaint (C.C.P. § 430.10(a).
2. The Second Amended Class Action Complaint fails to state a cause of action recognizable as a "class action" (C.C.P. § 430.10(e).
Thus, Defendants' demurrer should be sustained, and the Second Amended Class Action Complaint should be dismissed without leave to amend.
Dated: November 25, 1998 ___________________________________
Marcello M. Di Mauro
Counsel for Defendants
§ 453. Compulsory judicial notice upon request
The trial court shall take judicial notice of any matter specified in Section 452 if a party requests it and:
(a) Gives each adverse party sufficient notice of the request, through the pleadings or otherwise, to enable such adverse party to prepare to meet the request; and
(b) Furnishes the court with sufficient information to enable it to take judicial notice of the matter.
("… here the trial court faced a direct, acknowledged, undisputed and indefensible betrayal by counsel of the interests of his client and the putative class. In such circumstances, the failure of the trial court to take immediate remedial action to disqualify counsel would constitute an abdication of judicial responsibility, violating the public trust and exposing judicial institutions to public obloquy. As our Supreme Court has observed: "However, ultimately the issue involves a conflict between a client's right to counsel of his choice and the need to maintain ethical standards of professional responsibility. 'The preservation of public trust both in the scrupulous administration of justice and in the integrity of the bar is paramount ... [The client's recognizably important right to counsel of his choice] must yield, however, to considerations of ethics which run to the very integrity of our judicial process.' (Hull v. Celanese Corporation (2d Cir.1975) 513 F.2d 568, 572.)" (Comden v. Superior Court (1978) 20 Cal.3d 906, 915, 145 Cal.Rptr. 9, 576 P.2d 971.) (Emphasis added.)
PIMPCMP1 COMPLAINT FOR DAMAGES, Page of 8
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